Am I in big trouble??

[Bigcoat1]

Hi Everyone,

i think I might be in big trouble. My mum passed recently. For the last 4 or 5 years I held power of attorney and handled all of her financial affairs. We never had a formal diagnosis of dementia etc, however she became Increasingly confused so I just took over.
mum was quite well off with around 150k in savings, an income of 2k per month and a mortgage free home. My finances have been difficult since my divorce.
On a few occasions I borrowed from mom’s account when I was desperate. I always paid the money back asap. I never discussed this with mum although I know she she would have consented.
her affairs are now being looked over as part of private etc and I’m terrified that this roll come to light and I’ll be in huge trouble.
I know I can’t undo what’s been done, but what should I expect to happen?

Have you posted about this before, quite recently??

It's not theft if you repaid it! Stop worrying!
You paid it back. If questioned, say it was a loan and nothing will come of this!

This exact same thread was definitely posted earlier in the month.

Of course they will. The very fact that OP had POA meant that the person that they would have to ask did not have the capacity to understand the question and agree to anything. If it is being investigated as part of probate or by the office of the public guardian then it will most likely be discovered that OP was using her mum's bank account as a personal loan service.

It’s definitely against the rules of financial PoA, but if you document everything now on a spreadsheet - all loans and repayment dates - then you’re not likely to get into trouble.

This looks like it answers the question:

https://www.thefinancezone.co.uk/power-of-attorney-can-i-borrow-money-from-the-donor/

The very fact that OP had POA meant that the person that they would have to ask did not have the capacity to understand the question and agree to anything.

Not necessarily. I had POA for DM and she had full capacity right up until when she was hospitalised a week before she died. I was still able to manage her accounts

Obviously attorneys can’t help themselves to money, even if they pay it back, apart from small gift sums in keeping with the donor’s normal pattern of gift giving. I never said or implied otherwise.

However, I was replying to a PP who said POA only takes effect once someone does not have capacity.

This is not true.

POA can be used at the request of someone who does have capacity but can’t for some reason undertake the necessary financial tasks.

Yes. You are wrong.

It is really simple. If you are the trustee of someones affairs by means of a POA you cannot under any circumstances use it as a loan to yourself unless it was explicitly written into the POA at the time it was written.

Yes. It’s specifically against the rules. However point:

4 Attorneys must keep detailed records and accounts of all transactions and be able to prove they managed the donor’s property responsibly

Means that if she documents it all clearly now and there is no loss to DM’s estate, she may not get in trouble.

It dosent matter if she regularly gave you money. Once an official POA is in place and you are the trustee you are not allowed to help yourself from tbeir account, even if you do pay it back. It is financial abuse of a vulnerable person.

Depending on where you are in the world, this could be seen as abuse of your power of attorney.

Was your PoA officially drawn up and notarised?

Well, yes it is theft! It’s financial abuse.

If I were your sibling, I’d be deeply shocked, and angry.

How will anyone prove you and your mum didn't have a conversation about this and she agreed?

Dunno, I’m a Consultant, not a Solicitor so it’s all ifs, buts and maybes to me.

So long as you paid the money back I don't see the issue. Of course you should not have done it without asking and getting the required permission, but luckily for you your mum can't either confirm or deny that happened either way now, so if anyone asks you can just say she agreed to lend you the money. The important thing as that it can be shown that you paid it back.

Did you still owe money to her when she died? If you did tell the executor and pay back the money to the estate. If you didn't owe any money at the time it may not be a problem. I hope you kept really good records of where all her money was spent on things on her behalf and of the loans you took and repaid. It could take a lot of reconciling.

Nonsense. PsOA are affected for all sorts of reasons, not just incapacity. Someone might prefer for someone to act on their behalf and be consulted. I’ve advised on many corporate transactions where a shareholder/director has given POA to sign documents because they’re unavailable to sign (eg in holiday) or because it’s just more convenient for one person to sign on behalf of everyone else. Stop scaring people.

Yes, i gave seen this before...

OP is the executor.

Firstly I don’t see how you could prove or disprove your mother’s consent which could be a verbal agreement.

Secondly you can show repayment.

i would not worry about it. When my mother passed my siblings and I had to show gifts of money made in the previous 7 years because they then formed part of her estate for inheritance tax purposes. One sibling had an outstanding amount left to repay a loan, so that was then treated as a gift and deducted from their portion of the remaining estate. I imagine the outstanding £250 you borrowed will be treated similarly.

The bank statements will show that you have paid the money back.
It will at least show you putting money in her account

I would not worry about this at all.

That’s not true. HMRC can and do sometimes trawl through bank statements / accounts.

’HMRC can access bank account information during the probate process if necessary to assess inheritance tax (IHT) liabilities. While they do not routinely check accounts of deceased individuals, HMRC may investigate financial records, including bank statements, if there are red flags on the IHT return, such as unexplained gifts made within the seven years prior to death, or if the estate is insolvent and a creditor raises concerns. They may scrutinize withdrawals or transfers to determine if funds were used for personal expenses or gifts, which could affect IHT.
HMRC may also request documentation to verify the source and use of funds, particularly if the deceased had significant financial activity or if there are indications of undeclared income, such as rental income. Executors are advised to maintain detailed records, including receipts for expenses paid from the estate, to support the IHT return and avoid disputes.’

Because they want to ensure that somebody isn't avoiding tax, not because they are looking for theft.